Luxury developer Harry Macklowe, known for high-profile projects like 432 Park Avenue on Manhattan’s Billionaires’ Row, has slashed the asking price of his East Hampton estate by $5.5 million. The mansion’s original listed price in March 2024 was $38 million; now, it is listed for $32.5 million. This lucrative discount, however, has strings attached. Prospective buyers should be aware of a significant catch that comes with this seemingly steal deal.
Discount with a Major Hurdle
The mansion at East Hampton estate is a four-bedroom, five-bathroom residence located at 64 West End Avenue. Despite the luxury amenities, the property lacks a valid certificate of occupancy (C of O), making it uninhabitable under current regulations. While Shawn Elliott of Nest Seekers International, co-listing the property with Bespoke’s Cody Vichinsky, claims the home holds a C of O, the document dates back to 1987 and doesn’t reflect subsequent renovations.
“Then Harry went and renovated the house without permits. He needs a new C of O—and he can’t get it,” a broker familiar with the property revealed. Without this updated certification, any buyer would be unable to move in until the issue is resolved.
Legal and Financial Woes Mount
Macklowe’s troubles extend beyond building codes. The property developer reportedly planned to use the proceeds from its sale to offset mounting debts, including $89.5 million owed to a lender. However, he has defaulted on that debt and is presently embroiled in a legal battle with Israel Discount Bank of New York to prevent the seizure of pledged collateral.
Macklowe’s lawsuit claims the bank’s actions are “financially devastating—beyond the mere value of the collateral itself.” Yet, insiders suggest his troubles are largely self-inflicted. “He negotiated to borrow money. If you can’t pay back the money, don’t borrow it,” said one inside observer.
Adding to his woes, an insider revealed that the assets pledged as collateral are worth closer to $12 million, far below Macklowe’s claim of $20 million.
A History of Controversy
This is not the first time Macklowe has flouted real estate regulations. In 1985, he infamously demolished four buildings on West 44th Street without city permits, hiring a mob-affiliated firm to carry out the work in the middle of the night. The incident endangered lives and resulted in a $2 million fine, though Macklowe avoided jail time due to a lack of evidence of criminal intent.
Environmental Concerns Add to the Complexity
The 5,500-square-foot home is located on 2.71 acres by Georgica Pond, a waterway plagued by seasonal algae blooms due to pesticide runoff. This has also drawn scrutiny for unpermitted land clearing and additions that damaged nearby wetlands.
Macklowe’s actions prompted fines from East Hampton Village officials, though a source close to the developer admitted they had “no idea” why he hadn’t paid them promptly. Despite these complications, Macklowe has reportedly rented out the property and occasionally stayed there himself.
Possibility of Inflated Valuation?
Industry insiders question whether the estate is worth its current asking price of $32.5 million. During an interview, brokers estimated the property’s value at closer to $10 million to $15 million, citing the property’s uninhabitable status and environmental damage.
“That’s not even considering the damage he’s done to the wetlands, and he doesn’t have the money to restore them,” one insider noted.
A Challenging Sale
Macklowe’s situation reflects the perils of cutting corners. While the property’s location near ultra-wealthy neighbors like Steven Spielberg offers undeniable appeal, the legal, financial, and environmental issues surrounding the estate make it a risky proposition for potential buyers.
When the property was initially listed, East Hampton building inspector Thomas Preiato remarked that Macklowe “can sell the house, but no one can occupy it.” Without an updated C of O and resolution of the property’s various violations, this high-stake real estate listing remains a cautionary deal for luxury buyers and developers.
